Nicholas Barry

Recall the story of Rumpelstiltskin, in which a miller’s daughter is locked into a tower after her father promises the king she can spin straw into gold. Imagine the possibilities of someone who can turn worthless straw into valuable gold! Now, imagine that your nonprofit (or other community organization) can spin its own gold.

The Charismatic Organization makes the startling assertion that the most important resource for an organization is social capital. And unlike other resources (financial capital, physical capital, human capital), organizations can create social capital from scratch.

What is social capital, and what makes it so valuable? Social capital is the cumulative strength of connections and relationships between people. In fact, you frequently invest in your own personal social capital – when you do, you probably call it networking. In an organization, a strong, cohesive, productive culture represents a large amount of social capital. An organization with few lines of communication between different departments, or to the outside world, lacks social capital.

Social capital is valuable in part because it gives an organization access to other forms of capital (e.g. financial and human capital). Shirley Sagawa and Deborah Jospin, the authors, make the case that organizations should focus first on building internal social capital, then use that to build external social capital. This will bring more money, participants and recognition to your organization, not to mention more success.

How does an organization build social capital internally? Sagawa and Jospin emphasize the importance of having a mission your entire organization understands, building a strong, cooperative culture, and “people-focused management.”

A reliance on data and a habit for innovation, are two other aspects of a successful organization that do not pertain directly to building social capital, but which are nonetheless important. Your organization may be motivated to move quickly, but without the right data, you can’t be sure you’re moving in the right direction. Constant innovation helps keep the organization adapted to its environment.

Once an organization has built internal social capital, it can use that capital to build external social capital through active communications and outreach. The mistake many organizations make at this point is having too few ways to get involved – many organizations only involve outsider as donors and newsletter recipients. Charismatic organizations provide myriad ways people can get involved.

The Charismatic Organization presents an interesting, fresh and unique perspective on the strategies to build a successful organization. The book challenges you to build social capital in your organization. And after reading this book, I, for one, am ready to begin.